Newsletter

Congress easily OKs bill for vets, contractors

WASHINGTON — Democrats and Republicans rallied on a rare patch of common ground Wednesday and Congress approved legislation helping government contractors and unemployed veterans, finally giving President Barack Obama the chance to sign the first, tiny shred of his $447 billion jobs bill into law.

The House sent the bill to the White House by an overwhelming 422-0, six days after the Senate passed it 95-0.

The legislation creates tax breaks for companies hiring jobless veterans — a part of Obama’s jobs plan — and beefs up vets’ job-training and counseling programs.

It also repeals a 2006 law that would require the federal, state and local governments to withhold 3 percent of their payments to contractors. That statute, which doesn’t take effect until 2013, was supposed to pressure contractors to fully pay their taxes, but lawmakers now say the withholding would deny cash to companies that they could better use to hire more workers.

Obama’s signature would let him and lawmakers claim credit for protecting jobs at a time when the public is clearly furious over the nation’s unemployment rate, which has been stuck at around 9 percent. Despite the unity shown Wednesday, the day’s debate underscored the stark gulf that separates the two parties over how to fix the struggling economy, a division that is likely to dominate next year’s presidential and congressional elections.

Republicans said it was time for the Senate to approve nearly 20 House-passed bills that they say would create jobs, mostly by repealing or blocking energy regulations and others, and touted Wednesday’s vote as part of that drive.

“It sends a message to America’s job creators that jobs are our No. 1 priority and that Congress is committed to undoing policies that stand in the way of restoring prosperity,” said Rep. Wally Herger, R-Calif.

Rep. Sander Levin said the bill’s provisions were modest steps toward resuscitating the ailing job market and said Republicans needed to go much further.

“Passage of this bill represents a challenge to the majority in this House: End your blockade of comprehensive jobs legislation” proposed by Obama, the Michigan Democrat said.

The president’s jobs bill, introduced in September but mostly shunned by Congress, would continue reduced payroll taxes for workers and employers, extend unemployment insurance benefits and provide money to build roads, modernize schools and hire teachers, police and firefighters.

In a written statement from the White House, Obama congratulated both parties for approving the veterans’ tax credits, took credit for proposing them and prodded lawmakers to go further.

“This is a good first step, but it is only a step,” he said. “Congress needs to pass the rest of my American Jobs Act so that we can create jobs and put money in the pockets of the middle class.”

Senate Minority Leader Mitch McConnell, R-Ky., returned the favor. In a written statement, he tweaked Obama by urging him to hold a bipartisan signing ceremony and to invite Sen. Scott Brown, R-Mass., who had introduced a 3 percent withholding bill.

McConnell said inviting Brown would spotlight that “there are plenty of House-passed bipartisan jobs bills that we can all agree on if only Senate Democrats would bring them up for a vote.”

The tax credits for hiring veterans approved Wednesday will cost the government an estimated $95 million — a tiny fraction of Obama’s overall jobs plan. The credits would be as much as $9,600 for companies hiring disabled vets who have looked for work for more than half a year. The size of the credit would be based on the worker’s salary and how long the worker was unemployed.

The measure would also expand education and job training benefits for veterans, improve job counseling that troops get before leaving the military and provide an additional year of job services for disabled veterans.

The veterans’ programs would be financed mostly by extending a fee the Veterans Affairs Department charges to back mortgages.

Erasing the withholding requirement for contractors would reduce federal revenues by an estimated $11.2 billion over the coming decade. It would be paid for by making it harder for some elderly people to qualify for Medicaid by changing the formula used to determine their eligibility.

Many economists have said annulling the withholding law would have a minimal impact on hiring.

Its repeal was heavily lobbied by industry groups, with no visible opposition. This week alone, a coalition of around 200 trade organizations from aeronautical repair businesses to water treatment companies wrote to House members urging passage of the legislation.